Purpose

To determine whether the Rochester-Genesee Regional Transportation Authority’s Performance Incentive Program uses reasonable criteria to measure employee performance and whether incentive awards are warranted and justified. Our scope period covers April 1, 2011 through March 31, 2014.

Background

The Rochester-Genesee Regional Transportation Authority (Authority) provides public transportation services in Monroe, Genesee, Livingston, Orleans, Wayne, Wyoming, and Seneca counties. Since 2005, the Authority has had a Performance Incentive Program (Program) to reward its employees for meeting performance goals. A series of legal opinions and directives issued by various State oversight agencies provide guidance for public authorities regarding performance incentive programs, which, among other things, must be directly tied to the services each employee renders. Over the three fiscal years 2011-12 through 2013-14, the Authority distributed a total of $1.8 million in awards.

Key Findings

• The Program, by design, directed the bulk of incentive awards to upper management. Upper management received about $1 million, or a 57 percent share, of the total awards while accounting for less than 3 percent of the workforce.
• Over the scope of our audit, the Authority progressively transitioned the Program to one based exclusively on collective performance. Upper management’s incentives were not linked to specific work they performed. Further, for the employees sampled for review, we often found that the Authority did not maintain documentation supporting how the employees met or exceeded performance criteria.
• In comparison to other Upstate New York transportation authorities, the Authority awarded its executives the largest incentive awards by far, even though it already compensates its executive team at levels that often exceed those of its peers. Based on our comparison of these authorities’ ridership and financial statistics, we identified no compelling reason for the Authority’s higher incentive payments.
• During our audit, we provided preliminary reports to Authority officials that questioned the justification for upper management’s large incentive awards. Executive management refused to provide a written response to our findings. Subsequent to our fieldwork, we learned the Authority has scaled back the Program for 2014-15, but continues to direct most of the funds to upper management.

Key Recommendations

• Establish performance measures for Program award eligibility that are clearly differentiated from employees’ normal job duties and are tied to individualized effort, not collective performance.
• Ensure any Program policy decisions are supported by appropriate comprehensive research and empirical data, including analysis of operating trends and comparison with other transportation organizations. For transparency purposes, make this information available for public scrutiny.

Other Related Audit/Report of Interest

Rochester Genesee Regional Transportation Authority: Management of Employee Overtime (2009-S-103)